Good morning and welcome to the Gladstone Investment Corporation’s Fourth Quarter and Fiscal Year Ended March 31, 2012 Shareholders Conference Call. [Operator Instructions] Please note this event is being recorded. I’d now like to turn the conference over to our Chairman, Mr. David Gladstone. Please go ahead, sir.

All right. Thank you, Denise for that nice introduction, and good morning to you all. This is David Gladstone, the Chairman, and this is the quarterly earnings conference call for shareholders and analysts of Gladstone Investment. And the common stock trading symbol is GAIN and our preferred stock trading symbol is GAINP for Preferred. Thank you all for calling in. Happy to talk to shareholders about the company, wish we could do it more often. Maybe we’ll figure out some way to do an interim call one day. And we hope to take this opportunity -- that you'll take this opportunity to visit our website at www.gladstoneinvestment.com. You can sign up for email notices there, so you can receive information, timely information about all the things that are going on at your Company. And please remember that if you’re in the Washington DC area, you have an open invitation to visit us here in Mclean, Virginia. We're just outside of Downtown DC and please stop by, say hello, you will see some of the finest people in the business. And now let me read this statement that we always put in the front of all of you. This conference call may include statements that may constitute forward-looking statements within the meaning of the Securities Act of 1933 and Securities Exchange Act of 1934, including statements with regard to the future performance of the Company. These forward-looking statements inherently involve certain risks and uncertainties, and other factors even though they’re based on our current plans and we believe those plans to be reasonable. Many of these forward-looking statements can be identified by the use of words such as anticipate, belief, expect, intend, will, may, and similar expressions. There are many factors that may cause our actual results to be materially different from any future results that are expressed and implied by these forward-looking statements, including those factors listed under the caption called “Risk Factors” in our 10-K and 10-Q filings, and our prospectus as filed with the Security and Exchange Commission, all of which can be found on our website at www.gladstoneinvestment.com and also on the SEC website. The company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise after the date of this conference call. Please also note that past performance in the market information is not a guarantee of future results. First, we will hear from Dave Dullum. He is the President and a board member of the company. He will cover a lot of ground, including views of the future at this time. Dave Dullum?

Thank you and good morning everybody. As usual I like to review the plan for Gladstone investment, which is to invest in buyout transactions of businesses in the lower middle market. Our investments are primarily subordinated debt with equity and occasionally some senior debt. This combination produces a mix of assets in our portfolio, which is key to our strategy. Our debt investments provide income to grow our dividends while we seek to build shareholder value through capital appreciation of our equity investments. For instance, at 3/31/12, our investment assets at cost consisted of approximately a $191 million or about $72% in debt investments and about $75 million or roughly 28% in equity securities, which over time we expect will produce the capital gains. This ratio of roughly 72% to 28%, slightly higher in equity that our goal of 80-20. This currently is due to certain loan payoffs and a recent debt-to-equity conversion in the portfolio. But we do seek to have this ratio track towards this 80-20 target over time. I do wish to emphasize, though, that while the portion of our assets that we hold in equity securities is not producing current income, the debt portion is. For instance, in most recent quarter our total interest bearing debt portfolio realized a 12.4% cash yield, which is of course the primary source to pay our dividend. For the fiscal year the cash yield was 12.3%, roughly up from 11.4% from the prior year. Additionally, we often negotiate what we call success fees, which is a component of our debt instruments. We recognize these success fees as income when we receive the cash. So, for the fiscal years ended March 31, 2012 and 2011 we had success fees of approximately $700,000 and $5.4 million respectively. However, these amounts are not…

All right. Dave Dullum, that was a good report. We’re excited about the future for this company, but now let’s hear from our Chief Financial Officer, David Watson, on the fund's financial performance for this quarter. David?

Okay. Good morning, everyone. Before I go through the financial statements, I would like to highlight several key points. First, our closing on one new buyout subsequent to year-end totaling $9.5 million, highlights our commitment to steady investment growth. Since October of 2010, we have invested in 7 new proprietary portfolio companies, totaling approximately $133 million. Second, we believe our portfolio is performing well and the credit quality is good. This is reflected in the $9.2 million of net appreciation on our portfolio for the fiscal year. Third, we believe our capital position is in good shape. So, we were able to raise $40 million in new term preferred stock in the capital markets in March to complement our $60 million 3-year line of credit. At the time of this call, we have no borrowings outstanding on our line of credit and we have about $9.9 million in cash on the balance sheet. So we have the ability to deploy more capital for the right opportunities. And lastly, 100% of our distributions paid in fiscal year ended March 31, 2012 were covered by income and not a return of capital, which highlights our commitment to sustainable distributions and preservation of stockholder capital. Now for the details and I will start with the balance sheet. At the end of the March quarter we had $325 million in assets, consisting of $226 million in investments at fair value, $92 million in cash and cash equivalents and $7 million in other assets. Included in the cash and cash equivalent, was $85 million of U.S. treasury securities primarily through the use of bond funds at quarter-end to satisfy our asset diversification requirements. We had $118 million in liabilities, consisting of $40 million in term preferred stock, $76 million borrowed via a short-term loan and…

All right. Thank you, David Watson. I hope each of our listeners will read our press release and also obtain a copy of our annual report called 10-K, which has been filed with the SEC yesterday, and can be accessed on our website www.gladstoneinvestment.com and also on the SEC website. I think the big news this year was that we’re actively investing again -- new portfolio companies, existing portfolio companies, about $91 million. I think the backlog is building. I think the next 11 months are going to continue to be good times for this company. Other successes this year, the dividend increased by 25%, an extra dividend of $0.03 and net value per share increased from $9 to $9.38. Fair value moved from 78% to 85%. All of those are good news for existing shareholders, and we’ve been active in the capital markets obtaining some long-term capital, As you remember from many of the last discussions, lamented an ability to get long-term capital and finally with this $40 million term preferred offering, we added $40 million of longer-term debt. Additionally, we have very favorable 3-year line of credit with BB&T and KeyBanc and room to borrow under that line, and we’re looking to add some new investment opportunities now as you saw the starting out of the blocks -- we started out with a new one that Dave Dullum talked about. I think this is a fabulous fund at this point in time with a great opportunity for the future, the team lead by Dave Dullum and others just give shareholders a good return for the last year, and we’re certainly looking forward to the new year. People always ask me what could trip us up, and what could make things go wrong, and of course I mention the…

[Operator Instructions] Our first question this morning will come from Ross Haberman of Haberman Management Corporation.

One very brief question, you made reference to 2 non-performing credits, could you tell us a little bit about them, what you had originally invested, what you’re carrying them at, and will they end up being converted to equity if they haven’t been so yet?

Well, they’re both in the portfolio. ASH has been written down to 0. We keep putting a little money in there. We’re working with -- to get a new CEO on board right now, and that one is -- I think will come back in the following year, hard to know. It’s in the business of selling yellow school buses to various folks out in -- various school districts out in Phoenix, Arizona and also in Las Vegas. And that company has had its problems simply because the school bus business is down substantially because the counties and cities don’t have the money to buy new buses. So, it’s going to take a while for that one to get back. They’re also involved in the service business. They convert a lot of vans into things that were used by plumbers and electricians and those kinds of things. So, a good company, good people, just needs a second management team I think to run it and that’s where we’re going with that one. And Dave Dullum, why don’t you take CCE and just talk about it? They’re doing well now, but -- and coming back strong.

Yes, Ross, CCE is a -- also distributor of golf carts in the Northeast. And we had to, basically as a result of obviously issues with the golf market in general, this is over a year or so ago, restructure the balance sheet somewhat. They’re doing very well this year. They've maintained presence in their market, have large market share and I expect we will be able to convert that one back to cool status some time. And by the way as in ASH, we as in all of our cases we work very hard to have these companies, even though we might go into a, I’ll call it, temporary sort of restructure to be sure the business is performing, we work hard at doing that and then we bring them back to current pay status. So I’d hope that hope of these might do that certainly over time. So CCE had the problem with its competition. The competition came in, cut price and just like in any industry when you have one of the competitors cut price it hurts everybody in the business, but they sort of learned their lesson now. And pricing has come back to a reasonable amount and so as a result, I think that one will, as Dave said, will be back in the paying category sometime during the next 12 to 18 months.

So typically when you try to restructure these, do you -- is the number one, clearly you want to right the company and give it the right capital structure, but do you -- how readily are you open to converting part of the investment's equity or you really don’t ever want to do that and that’s the last option? [indiscernible] if you can keep your -- you can keep your investment in some sort of debt-paying instrument.

Well, in the case of some of these companies, we’re primarily the only debt there. So, what we normally do there is just give them relief on the payments, in some cases we have converted to preferred stock, meaning we get out before the original investors. But it's -- you’re right in saying, it’s the last thing we do is convert it to equity. Now it will be interesting to see in some of these cases when they come back and we will tap those when we come back in 6 months or so as we move through these fix ups in these 2 companies. I know in Gladstone Capital we’ve had a couple that have come back pretty nicely. And we just have to see if these 2 get back. I think CCE will be back soon. I’m not so sure when ASH will come back because it’s in the middle of Phoenix and Las Vegas where the economies are really hit very hard.

And our next question will come from J.T. Rogers of Janney Capital Markets.

It sounds like the investment pipeline is strong, as you’ve got a -- one deal has already been closed since quarter-end and you’re working on some additional term sheets, but I was wondering what led to the slower originations in the most recent quarter? I know the business is lumpy, but is this -- does that have anything to do with valuation on new deals? I think maybe you mentioned something about that in your comments.

Yes, J.T., I think to some extent that’s true and you hit it on the head, though, it is a lumpy business. We were very active, we have a very long good strong, I would call it pipeline, and as you know in some deals as I mentioned the valuations are so high, we just don’t get there and other people willing to pay, a turn or 2 more than we are. So we are patient in what we’re doing and the key is to keep a good supply of prospects again in that pipeline. I feel really good about that and our targets we have internally, we are sort of moving towards those so. And as you say, we got a good start in terms of the deal we closed right after the quarter-end and a couple that are in the pipeline hopefully will come to fruition sometime soon.

Okay, J.T., as Dave Dullum mentioned, the worst thing you can do in this business is to overpay. It always comes back to bite you somewhere along the way. So we’re just being cautious.

Just a follow-up to that is are there any industries or sectors that you think are particularly attractive right now in terms of either valuation or just on a fundamental basis?

Typically where the scenario we operate as you well know, where we see -- we’re looking at things that somewhat are related to some of the aerospace on the commercial side, not defense necessarily, just other basic manufacturing businesses where we’re looking at a number of those types of companies. So, that’s really where we are. We can see a few in the healthcare services area, those valuations seems to be somewhat reasonable. So, I would say that those are ones that come to mind immediately.

Okay, great. And then it looks like the share values of Banco has been trending down since for -- really since December of 2010, then the rate of decline accelerated a little bit in the most recent quarter. I was wondering what drove that decline and sort of what’s going on that business?

Yes, they are -- that’s a good -- very good company. They specialize in a very highly engineered machining of parts for a company; I think we’ve mentioned this in fact on prior calls. You’ve heard of the DaVinci Robotics Machine, that one of their companies -- their major customers is manufacturer of those machines. And we’re kind of shifting from a, I would call it a more short run to longer run machining of products and expanding their customer base. So, the company is frankly is going through a bit of a transition in that regard. We’re working on that in a very positive way with beefing up the management team including on the sale side so it's just going through that period where as I say sort of transitioning, but we feel good about them and their quality of what they do is certainly a good thing. So, I hope its temporary, frankly, and we just have to keep working at it.

That makes sense. As they transition from short run to longer run machining, is there any risk there that opens up competition for maybe larger machining companies that they could start filling those orders or might be more interested in?

It's certainly always that risk, right. It’s more about just doing a better job internally, maintaining their margins. And as I say, making that internal transition frankly themselves more from the short run development stage, let’s call it to managing longer run. So, I’d say that’s really -- it’s more than, that’s necessarily opening up significantly to competition.

Okay. That makes sense. And just sort of one last question on ASH Holding, I guess you increased the revolver by about just a little under $3 million, what drove the decision to increase that?

Yes, we -- ASH is one and as David Gladstone mentioned earlier, we -- it's one that we’ve [indiscernible] obviously a lot because of the economy they’re struggling with. We had a senior lender in there and they were coming near to the end of their term. And it gave us more flexibility to frankly take them out, which is basically what we did. So, that in combination though, with and this is very important, with their main supplier which is Thomas [indiscernible] which is who we're the dealer for, providing floor planning effectively on large number of school buses. We essentially stepped in to take the revolver capability around part supplies and so on. So, we actually also increased our collateral if you will, by taking that on. So it’s frankly just the ability to have more control over how we manage that business ourselves.

Okay, great. That makes a lot of sense. And so, is that $3 million increase, would that be collateralized by receivables and inventories?

Yes, receivables inventory, right. Mainly again, receivables, parts and also underlying value in some of the buses as well, that will -- our floor plan.

[Operator Instructions] And our next question will come from Adrian Day of Adrian Day Asset Management.

Clearly, there is room to increase the dividend again and I was just wondering if perhaps you’re being a little bit cautious to see how things go or might we see another bonus dividend rather than an increase in dividend?

It’s hard to say at this time. We always like to be so far in the money that when we increase the dividend that there is no chance we have to reduce it and obviously we got off to a good start by having an extra $0.03 a share for the year ending and paid that out as an extra dividend. I don’t like extra dividends simply because at the end of the day I think that no one really cares about them and as a result we will work real hard this year to see if we can expand the dividend a bit in order to take up the extra income that we have. But hard to know at this time, Adrian, I know everyone asks me the same question. With this company with only 18 investments now, really very hard to project exactly when we'll reach that point that will make us all happy enough to increase the dividend.

I am showing no additional questions. This will conclude our question-and-answer session. I’d like to turn the conference back over to our Chairman, Mr. David Gladstone.

All right. Thanks again for everybody for tuning in. We look forward to hearing from you and you’re free to email our HR person here, Lindsay always looks for questions in the email and again we will see you next quarter. That’s the end of this call.

Ladies and gentlemen, the conference has now concluded. We thank you for attending today’s presentation. You may now disconnect.